This invention relates to automated retail systems and methods. More particularly, and not by way of limitation, the invention is directed to a system and method for influencing customer behavior by providing an incentive to the customer in the form of a price-per-unit (PPU) discount on fuel as a reward for demonstrating the desired behavior.
As used herein, the term “vendor” refers to the manufacturer of a specific product or the supplier of specific services. The term “merchant” refers to the store where the products are purchased, such as grocery stores, convenience stores, gasoline service stations, unattended fueling stations, and the like. A point-of-sale (POS) terminal may be a terminal inside the store, or may be an island-card-reader (ICR) implemented within a fuel dispenser.
Financial card authorization networks charge merchants a fee for processing credit and debit card transactions. The network fee for processing credit card transactions is higher than the fee for processing debit card transactions. Therefore, from the merchant's perspective, it is desirable to encourage customers to use debit cards rather than credit cards. Additionally, many cards are dual-mode” cards, which can be used as either a debit or a credit card. Merchants also find it desirable to encourage customers to use their dual-mode cards as debit cards rather than credit cards.
To achieve this objective, the POS system must be able to identify a card as being a credit-only card, a debit-only card, or a dual-mode card when it is swiped at the payment terminal. Currently, many POS systems make this identification by requesting the customer to select either Credit or Debit when beginning the transaction. This approach, however, may result in the customer selecting a mode of payment that is not valid for the particular card. If the customer makes an invalid selection, an additional transaction fee may be incurred. In any event, there is no incentive for the customer to select Debit instead of Credit.
Some financial card authorization networks maintain a Bank Identification Number (BIN) File that contains card information that provides additional insight into whether the cards in a particular range of cards are credit-only, debit-only, or dual-mode cards. However, there are several problems with using the BIN File. First, the BIN File is extremely large and cannot be sent directly to the POS terminal. Instead, the network host computer generally sends the BIN File to the merchant's host computer periodically (for example, once a week). When a transaction is initiated and the customer selects Debit or Credit, the merchant's POS system dials out to the merchant's host and retrieves the information from the BIN File for the card swiped by the customer. A second problem is that the BIN File is not always accurate. One reason for this is that the BIN File is generally a best guess approximation by the network host based on actual transactions processed over time. Another reason is that card issuers do not cooperate (for competitive reasons) to provide BIN range information to each other, so the information is often incomplete. Card issuers may also be reluctant to share this information because they do not necessarily want the customer to choose debit because this reduces their transaction fee revenue. In any event, once again, there is no incentive for the customer to select Debit instead of Credit.
The issuers of credit and debit cards also have programs to encourage consumers to utilize the issuers' cards when making purchases. Conventionally, these programs have consisted of giveaways of promotional merchandise, low interest rates on unpaid balances and balance transfers from other cards, and cash back at the end of the year (usually 1-2 percent) on purchases made throughout the year. Some manufacturers such as automobile manufacturers have established affinity-type relationships with card issuers to issue credit cards with a manufacturer's logo on the face of the card. Use of such cards results in cash back awards good only on purchases of the associated manufacturers' products. Similarly, some merchants have established affinity-type relationships with card issuers to issue credit cards with a merchant's logo on the face of the card. Use of such cards results in cash back awards good only on purchases within the associated merchant's stores. The manufacturers' programs and the merchants' programs are generally less effective than conventional cash back programs because of the limitations placed on use of the cash back award.
With existing affinity-type relationships, the reward does not occur at the time or point of purchase. Instead, the reward is posted to the customer's credit card account and appears on the customer's monthly account statement. The reward may appear as a monetary credit, or may appear as points, which the customer can redeem when the cumulative total surpasses defined threshold levels. Thus, the reward is not immediate, and the customer must take additional steps to redeem the reward.
Many merchants are also implementing systems to increase the security of financial transactions occurring in their stores. For example, increased security is provided by registering biometric information for customers and checking this information against a current customer's information to verify the identity of the customer. Many customers, however, are reluctant to provide such information or do not want to take the time to provide the information.
Merchants such as grocery stores, convenience stores, and gasoline service stations generally sell goods inside the store in addition to selling fuel. These merchants generally realize a higher profit percentage on inside sales than they do on fuel. Therefore, it is desirable from the merchant's perspective to provide an incentive for customers who purchase fuel to also come into the store and purchase goods inside.
What is needed in the art is a system and method that overcomes the disadvantages of existing systems and methods by providing a customer with an incentive to demonstrate certain desirable behaviors. The present invention provides such a system and method.